What is more, for the purposes of the liquidation process, it is necessary to:
The purpose of liquidation statements is, among others, to present the economic situation of the company. It is also important to indicate the size of assets which, after settlement of any outstanding liabilities, must be distributed between the partners.
According to Art. 288 of the Commercial Companies Code of 15.09.2000 “after the approval of the financial statement as of the day before the distribution of assets remaining after satisfying or securing all debtors between the partners (liquidation statement) and after the completion of the liquidation, liquidators should announce the said statement at the registered office of the company, submit it at the registry court and, at the same time, file a petition for removal of the company from the register”.
In order to prepare such statements during the liquidation process, a Resolution is needed on putting the Company in liquidation, along with information on the person who serves the role of the liquidator. The statement must include the information on the date on which the company is put into liquidation and in case of statements as of the day before and as of the date of distribution of assets – the information on the date of liquidation.
Additionally, it is required in Poland to add the information that due to the beginning of the liquidation process, the financial statement of the Company has been drawn up on the assumption of lack of the going concern basis, without a substantial limitation of its scope. It should also include the information that due to the liquidation process, the Company does not meet the criteria provided for in Art. 47 section 3 of the Polish Accounting Act with regard to presentation of revenue and costs on discontinued operations.
Pursuant to Art. 36 section 3 point 2 of the Polish Accounting Act, components of equity of a limited liability company that has been put into liquidation must be, on the beginning date of the liquidation process, be merged and presented as share capital in the balance sheet, reduced by own shares.
As part of the preparation of the balance sheet for the purposes of liquidation, the company is also obligated to establish a reserve for the expected costs and possible losses. Those include events that might occur as part of discontinuation of operations.
Valuation of assets of an entity put into liquidation takes place in accordance with the principles indicated in Art. 29 of the Polish Accounting Act. It is carried out based on the possible net sales prices not higher than purchase prices, costs of manufacture. Additionally, the price is reduced by past amortization and depreciation write-offs as well as impairment write-offs.
Due to the fact that during the liquidation process any competences of the partners are transferred to the liquidator, it is the liquidator who affixes their signature under the liquidation statement and the liquidator is responsible for its submission.
It should be noted that the liquidation statement is not subject to an obligatory review by an authorized entity since the failure to meet the condition of continued operations.
Author: Weronika Komorowska, Senior Assistant of the Reporting Department at MDDP Outsourcing.
Accounting Act of 29 September 1994.
Act of 15 September 2000 – Commercial Companies Code.